US cleantech boom draws bipartisan support

The outcome of the US presidential election could have significant implications for global energy dynamics. However, Rystad Energy’s analysis suggests that the domestic renewable energy and cleantech sectors will continue to thrive, even in the event of a Republican victory. This trend is expected to be particularly pronounced in Republican states such as Oklahoma, Iowa, Florida and Texas, where substantial investment in manufacturing and other infrastructure is leading to increased job creation.

Rystad Energy estimates that by 2030, these states will account for 57% of all U.S. battery cell production capacity and 59% of all U.S. solar PV cell and module production, as well as 95% of all hydrogen production capacity and 83 % of the carbon capture capacity. This underscores the transformative impact that cleantech has had on infrastructure and employment, particularly in swing states—those that are not firmly aligned with either major political party and could be won by either side in future elections. Continued investment in clean technology industries highlights the economic benefits of renewable energy and underscores the impact of the Inflation Relief Act (IRA) of 2022.

Cleantech is increasingly becoming a bipartisan success story in the US. This is underscored by our analysis, which shows that the bulk of clean-tech projects, from solar power and batteries to hydrogen and carbon capture, are located in Republican cities. The tangible economic benefits generate widespread support, ensuring that the economic momentum behind clean tech is likely to remain robust even under a potential Republican presidency. These sectors are poised to expand further, whether we see a red or blue result in November,

Lars Nitter Havro, Head of Macro-Energy Research, Rystad Energy

Learn more with Rystad Energy’s Solution for energy scenarios.

Based on Donald Trump’s previous tenure, there has been speculation about his stance on clean technology development, especially after the US withdrawal from the Paris Agreement on climate change. However, cleantech initiatives did not come to an abrupt halt during his tenure. Many Obama administration projects continued under Trump, and his administration even implemented a four-year, 30 percent tariff on imported solar panels and modules in 2018 to protect and boost domestic solar production by making imported products more expensive. Notably, more onshore wind capacity has been added under Trump than under Biden so far, suggesting the wind industry may be more affected by economic factors such as interest rates than the political climate in the Oval Office.

If the Republican party wins the 2024 presidential election, the incoming administration will inherit the IRA and numerous pre-approved clean energy projects, making it unlikely that these initiatives will be abandoned. Despite a mixed clean-tech record, fossil fuel production during Trump’s presidency has been lower than current levels under Biden, and investment growth has maintained a striking similarity, indicating persistent momentum in US decarbonization efforts.

Assuming a Republican majority in the White House and Senate in 2025, we could see efforts to reduce or weaken the Biden administration’s climate and environmental policies, including the IRA. This may impact the adoption of electric vehicles (EVs) and lead to reduced environmental regulations and simplified permits for fossil fuel projects. Of course, due to the nature of the US legislative process, if a Republican president faces a Democratic-controlled House of Representatives, any major repeal attempt could be blocked. However, executive actions could still allow for regulatory changes, potentially slowing the drive toward renewable energy and electric vehicle adoption.

Recent legislative proposals, such as Vice Presidential candidate Sen. JD Vance’s Drive American Act, which seeks to repeal tax credits for electric vehicles and provide incentives for internal combustion engine (ICE) vehicles, are still in their early stages . However, President Trump’s recent shift toward a more favorable position toward electric vehicles, influenced by the endorsement of Tesla CEO Elon Musk, suggests potential policy changes that relieve some incentives for electric vehicles. Additionally, the Limit, Save, Grow Act, which seeks to cut funding for green energy and clean projects, faces challenges in the Senate, with some provisions already being gutted due to domestic opposition.

The chance of repealing the IRA remains low, even with a Republican majority in the Senate, because of concerns about competitiveness, job creation and countering China. However, the divergent priorities of Republicans and Democrats could lead to legislative gridlock, impacting energy projects and possibly leading states to develop varied energy policies, some focusing on renewables and others on fossil fuels.

Of Rystad Energy

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